medium · Volume Spread Analysis background-trend-context
A practitioner sees an 'up-thrust' (wide spread up, close on low) but the market does not decline over the next two bars. Instead, it produces narrow-range bars on very low volume.
What does this 'negative response to a negative signal' suggest?
- A slow-forming mushroom top as the market gradually rounds over here at the top.
- The up-thrust occurred in a strong background and the market is absorbing the weakness.
- The professionals are doing no-demand selling here, so the collapse is imminent.
- The market-makers are deliberately hunting for stop orders placed above the up-thrust high.
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